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The need for ambitious CAP reform1
The Common Agricultural Policy (CAP)2 fails to adequately fulfill important societal objectives: to enhance biodiversity and climate protection, improve water quality, preserve scenic landscapes, increase animal welfare, promote innovative, efficient farming and fair competition in the internal market, and avoid harming farmers abroad. The debate on the future of the CAP beyond 2013 presents the opportunity to significantly improve this policy.
Broad agreement among experts
The shortcomings of the current CAP and recommendations for more effective agricultural policies have been substantiated in numerous scientific publications. A group of leading agricultural economists from across Europe has issued a declaration on ‘A Common Agricultural Policy for European Public Goods’. National advisory bodies, such as the Scientific Advisory Council of the Federal Ministry of Food, Agriculture and Consumer Protection in Germany and the Social and Economic Council in the Netherlands, have also called for far-reaching changes.
Policy-makers’ status quo bias
Unfortunately, decision-makers in agricultural policy appear unwilling to seize the opportunity for substantive reform. Their proposals intend to maintain the status quo to a large extent. A critical lack of reform ambition is manifest in the ‘Franco German position for a strong Common Agricultural Policy beyond 2013’, in the own-initiative ‘Report on the future of the Common Agricultural Policy after 2013’ by the European Parliament, and in the leaked Communication by DG Agriculture on ‘The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future’, among others.
Guiding principles for a new CAP
We call on policy-makers to pay less attention to special interests. For a future CAP that better serves the public interest, we recommend five guiding principles.
- Targeting on public goods: All subsidies should be closely linked to the provision of public goods. Any subsidy that is not differentiated according to farmers’ provision of public goods, such as the Single Farm Payment, should be progressively phased out. The alleviation of rural poverty should be a function of social and not agricultural policy.
- Environmental focus: Sustainable land use should become the key objective of the CAP. This includes biodiversity protection, climate change mitigation and responsible water management.
- Market orientation: Generally, well-functioning markets rather than state intervention are the best way to attain a demand-oriented, innovative and competitive farm sector. Great care should be taken that subsidies distort production and prices as little as possible. Export subsidies should be abolished.
- Global food security: The EU should promote global food security through an open trading system, support for agricultural productivity in developing countries, climate change mitigation and the preservation of its own sustainable production capacity. To enhance productivity, more public investment in research and development should be undertaken.
- Subsidiarity: The CAP should focus on objectives and policy instruments for which EU-wide coordination creates the greatest value added. It should be carefully examined where burden sharing between the member states and the EU, instead of full EU-financing, can be extended.
Policy-makers must show more reform ambition for the post-2013 CAP if they are serious about the Europe 2020 strategy and the EU’s high-level environmental commitments.